Government plans to tackle the problem of social care funding have been branded as “a hammer blow to local authorities” by a leading councillor.

This week, the Government unveiled plans to offer the elderly facing care home fees a council loan to avoid having to sell their own house.

Town halls will be ordered to draw up “deferred payment” schemes charging interest on the payments, which will be recouped from the person’s estate after they die. Local authorities will also have to arrange financial advice to help older people plan for their future when the Care Bill comes into force in 2015.

But Councillor Amir Hussain, the executive member responsible for adult services at Bradford Council, said: “These proposals have not properly addressed the funding questions of how much help the state should give.

“The whole issue has been kicked into the long grass.

“The funding issue is still a big problem. It has put more burden on local authorities and you will see self-funded people come to the Council to be reassessed. When reassessed the burden is on the local authority.

“None of this is good news. It is a hammer blow to local authorities.”

The Government has also announced a cap on the amount of social care as £72,000, double the figure of £35,000 put forward in a report by economist Andrew Dilnot on the future of social care. That will mean that those who have to pay for care will have to pay £72,000 before they receive the care free.

Michelle Mitchell, of Age UK, said: “We welcome the consultation as one more step towards our crumbling unfair social care system for current and future generations, but it is clear the new system is complex and there is still a long way to go to make sure it works and achieves its aim.

“However it is crucial that the public understands what costs are included under the cap and what impact the proposal will have. With a cap set at £72,000 it is clear that only a relatively small percentage of older people will receive financial support as a result.

“It will also only apply to those who are assessed as eligible – so people may be surprised that even those with quite considerable care needs may not have access to the system. Age UK would like to see it open to all those who would currently be assessed as having ‘moderate’ care needs.”

The Council’s consultation into raising the benchmark for how much help the elderly get in their home from moderate to substantial or critical ends on August 4.